Employment
Preparing for the pink slip
Plan B
Our region's looming layoffs and salary cuts could happen to anyone, so make a financial plan B
By Lucy Lazarony
Bankrate.com
The layoffs that you've been hearing so much about have swept through your company. You've gotten the boot. You're out of a job.
It's financial crunch time. So act like it. It's time to get serious about the money you have and the money you won't have once that final paycheck gets cashed.
Don't leave empty-handed
First off, make sure you understand all the financial details of your departure. If you're under a contract, understand everything you're supposed to do to get everything that's coming to you. That includes health care, pension/retirement benefits retirement or health savings accounts and so on. If you're white-collar, aim to make that last paycheck as big as possible. If you can, negotiate the best possible severance package that you can. Work the guilt.
"If you've been a good employee, they probably feel a little bit guilty," says Ginita Wall, a certified financial planner and cofounder of the Women's Institute for Financial Education. "Try to get some sort of golden parachute."
Ask for everything you can. Ask for more money, for continued use of a company car, for help with health care coverage. You won't get anything if you don't ask. So speak up. It's worth a shot.
Apply for unemployment
"You've paid for it. You may as well use it," Wall says.
Who couldn't use an extra couple hundred dollars a month after a job ends?
"If you walked by a couple of hundred dollar bills lying on the ground you'd pick them up. It's not just peanuts," Wall says.
Time for a cash diet
The next step is poring over your budget. It's time to make some serious adjustments.
"Really take a cold, hard look at what you've got coming in," says Howard Dvorkin of Consolidated Credit Counseling Services in Fort Lauderdale, Fla.
Also take a look at what money is going out and why. Decide what monthly expenses you can live without. Do you really need call waiting and three-way calling on your phone? What about all those extra cable channels on your TV?
"Look at your budget and cut back all unnecessary expenses," Dvorkin says.
"You'll be amazed at how thrifty you can get," says Catherine Williams, president of Consumer Credit Counseling Service of Greater Chicago. "There's just tons of things we can do without."
Prioritize your bills. Make a list of monthly expenses that absolutely have to be paid. Topping the list should be your mortgage or rent, followed by utility bills, auto payments and insurance bills.
"We never want anybody to stop paying insurance. Because when they do that's when they have an accident," Williams says.
And don't forget about food. Everyone has to eat, although you should probably pass on any fancy restaurant dinners for a while.
You'll also want to keep paying on your credit card bills even if it's just minimum payments. If you're unable to pay a bill, contact the creditor as soon as possible. Don't wait until you're late.
"Always call before the payment is due. Creditors have more tools available to them before you miss a payment than after you miss a payment," Williams says.
